The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision have jointly adopted the attached consumer protection final rule concerning retail sales of insurance products by a depository institution. The final rule's effective date is April 1, 2001. The final rule applies to retail sales, solicitations, advertising, or offers of insurance products or annuities made by the bank, by any person at an office of the bank, or by any person outside a bank if the transaction is made on behalf of the bank. A transaction is considered "on behalf of" the bank when:
The final rule prohibits the bank, or anyone acting on the bank's behalf (a "covered person"), from engaging in any practice that could mislead someone or otherwise cause a reasonable person to reach an erroneous belief about:
The final rule requires that the covered person provide the consumer appropriate disclosures to avoid customer confusion in these areas. The disclosures must be provided both orally and in writing before the completion of an initial sale to a consumer. The covered person must also obtain a written acknowledgement or receipt of the disclosures from the consumer. Short-form disclosures are appropriate for television broadcasts, ATM screens, billboards, signs, posters and written advertisements and promotional materials. The disclosures would not be required in advertisements of a general nature that merely describe or list insurance services or products offered. Under the final rule, sales of insurance must be kept physically segregated - to the extent practicable - from the area where retail deposits are routinely accepted from the general public, such as the teller line and window. Areas where retail deposits are only occasionally taken, such as platform sales areas, would be exempt from the physical separation requirements. For more information, please contact your FDIC regional office or Keith A. Ligon (202-898-3618) in the Division of Supervision or Michael B. Phillips (202-898-3581) in the Legal Division.
Attachments: Dec. 4, 2000,
Federal Register
, pages 75822-75848
Distribution: FDIC-Supervised Banks (Commercial and Savings) NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200). |